Mending Our Broken Heart: Can We Fix It? Downtown Needs Triad of Support for Revival

“Downtown KC: Mending Our Broken Heart,” was a groundbreaking series originally published by The Kansas City Star 20 years ago this month.

It was written by former staffers Jeffrey Spivak, Kevin Collison and Steve Paul, with photographs by Rich Suggs. It was edited by former deputy national editor Keith Chrostowski.

CityScene KC thanks The Kansas City Star and Mike Fannin, its president and editor, for granting permission to republish this report.

While The Star retained the text of “Mending Our Broken Heart,” the original photos and graphics were unavailable. Photos of that missing material from a reprint of the series were used as much as possible.

Minneapolis invested $4 billion in once decade to remake its downtown. Denver lavished $6 billion on its downtown. Cincinnati just finished spending $1.2 billion. Louisville is pouring in $1 billion right now.

That money went to many different projects and came from many different sources, but it all happened with one common spark: committed leadership.

Now Kansas City finds itself behind our peer cities in most measures of downtown progress and prosperity. There’s no shortage of ideas to revitalize downtown. What it really needs, in the eyes of everyone involved, is more leadership.

More investment from the business community. More help from City Hall. More focus from local foundations.

And, if Kansas City’s peers offer any lessons, our downtown needs these three groups to stitch up their differences and get along.

Because what various leaders have in mind for downtown Kansas City is going to take at least $1 billion, too.

Look at key investments now in the planning stages: A performing arts center and arena–that’s a half-billion dollars right there. a beefed-up Union Station, an expanded Bartle Hall, a sleeker bus transit system, additional parking garages–that’s another third of a billion dollars.

More tree-lined streets and crews to clean the streets–tens of millions. And don’t forget ideas to turn vacant high-rises into condominiums or attracting major employers to new buildings–thats hundreds of millions more.

The $1 billion price tag may sound like a lot, but downtown’s budding leadership believes it can be achieved if it’s spread across a decade and divided among the public, private and philanthropic sectors.

“A billion dollars is not that much money actually, when you see how is spent on the (Kansas City) airport or the Grandview Triangle, just redoing what we’ve got,” says Patrick McLarney vice chairman of the Shook Hardy & Bacon law firm downtown.

“Over a period of years, we can do it.”

A view of the downtown skyline from the Crossroads Arts District

After all, our grandfathers did it, in even worse economic times. During the Depression, the civic establishment devised a legendary 10-year plan to build municipal buildings like City Hall, and citizens approved it despite a cost that translates to a half-billion dollars today.

And our peer cities are doing it today, using a variety of downtown leadership models. In Denver, the mayor jump-started housing. In Charlotte, N.C., a powerful businessman led. In Pittsburgh, the philanthropic sector took the lead on arts and culture facilities.

Kansas City likely will look to all three of these leadership sectors to share the obligations and responsibilities.

Our leaders have made a start. A new generation of business leaders is making downtown more of a priority. The mayor talks about downtown more than any government official in recent memory. And a philanthropist has committed a record amount of money for a cultural project in downtown.

Still, downtown has decades of discord to overcome.

“The problems I’ve seen in rebuilding downtown Kansas City have had to do with divisions within city government, divisions within the business community, and divisions between the city and the business community,” says Michael Haverty, chief executive of Kansas City Southern, which just opened a new headquarters downtown.

“Now, I believe that situation is changing.”

Area residents believe it’s about time. In an opinion poll for this series, more than three-quarters of respondents across the area believed neither business leaders nor city officials were doing enough to revive downtown.

“It doesn’t take a rocket scientist to figure out what the biggest problem is,” says Johnson Countian C.M. Holland. It is lack of vision, and the leadership to implement that vision. All talk–blah blah blah blah blah–and no action. It is embarrassing.”

Still, in the same poll, 87 percent wanted downtown revived in some way. Citizens want a place to be proud of, a place to show off to out-of-towners.

Mark Winston grew up here. He went to college here. He met his wife here. He still lives and works here–downtown. But he also intends to leave in a few years, because downtown is active enough, isn’t urban enough, isn’t fun enough.

“If I could see the city government and the business community talk about what’s real and lay out specific, definite plans to make this thing work,” the 24-year-old Winston says, then I wouldn’t be so apt to bail from Kansas City.”

Jonathan Kemper, chairman and CEO of Commerce Bank, spoke at the grand opening of the renovated Commerce Tower apartment project.

From business

Every month now, some of the new pillars of Kansas City’s business community gather in public, around one table, with a common agenda: downtown.

Jonathan Kemper of Commerce Bank is there, but not his father James Kemper Jr. Tom McDonnell of DST Systems Inc. is there, but not Landon Rowland from DST’s one-time parent company, Kansas City Southern.

A new generation of leaders is emerging, and it is paying more attention to downtown.

R. Crosby Kemper III is starting to take over for R. Crosby Kemper Jr. at UMB Bank. Don Hall Jr. has succeeded Donald Hall a Hallmark Cards Inc. Bill Berkley has ascended after Bert Berkley and former Mayor Richard L. Berkley of Tension Envelope. Terry Dunn and his brothers are following Bill Dunn Sr. at J.E. Dunn Construction.

“You kind of have a changing of the guard going on, which I think is positive because they don’t have as much baggage,” says Kansas City Southern’s Haverty.

As his change has occurred, the Civic Council–a coalition of these top executives and others around the region–started turning its attention back to downtown. At first, the group questioned what it saw as bad projects, like the Power & Light District.

“We were sort of perceived as saying ‘Don’t do that,'” says lawyer David Frantze with Stinson Morrison Hecker. “But we never had an answer to what we wanted downtown to be.”

Now they do. Look at what business leaders have done in the past two years:

–Created the Sasaki plan, a comprehensive blueprint for downtown.

–Agreed to form a business improvement district within the freeway loop and pay more than $1 million a year for additional street cleaning.

–Raised money for several endeavors, from the formation of a downtown-oriented political action committee, to the renovation of a vacant bank building as the new home for the main public library.

Downtown’s new business leaders known even more can be done.

They want, for instance, more major employers to relocated downtown.

Already, Stinson Morrison Hecker, Waddell & Reed, the Federal Reserve Bank and HOK Sport+Venue+Event are in the market for more office space, and business leaders like Tom McDonnell and Jonathan Kemper are lobbying some of these to stay downtown or move here.

“The biggest impact corporations have in the community is not in writing checks, it’s in their employment and space needs,” says McDonnell, whose company has set the standard for downtown commitment.

Another key that some business leaders see for downtown’s future lies with its financial institutions. Developers trying to renovate downtown’s vacant buildings want easier access to capital.

Of the 10 largest housing projects built or started since 1998, none received financing from Commerce or UMB, the two big local banks.

The Kemper banking families deserve ample credit for their businesses downtown, while other major corporations, including their competitors, have moved jobs out. But the banks’ tight financing practices have been such a longstanding complaint that house developers don’t even approach them.

“We don’t have the lending environment other communities enjoy,” says downtown condo developer George Birt, whose financing comes from out-of-town.

The Kempers respond that they’re not big real estate lenders. “We’re not active in that market,” says UMB’s Crosby Kemper III.

In several of Kansas City’s peer cities, local banks have been a catalyst for downtown projects in the past decade. In St. Louis, the regional director of a national bank pledged $100 million in loans and equity for downtown projects. In Charlotte, local banks financed downtown deals ranging from skyscrapers to condos.

“It’s very important to have community lenders like that,” says Jay Camp with the Charlotte Center City Partners.

City Hall was built as part of an ambitious civic works program during the Depression.

From government

At last month’s dedication of Kansas City Southern’s new headquarters, Mayor Kay Barnes gave what some thought was her strongest speech yet on downtown.

“I won’t be satisfied until I see a light in every storefront, bright clean streets and sparkling facades,” the mayor proclaimed. “I won’t be happy until I meet scores of people walking on the sidewalks, using new retail amenities and visiting great attractions.

“I’m encouraged by the work we’ve done to date, but I’m not finished.”

As the mayor has been high-profile in discussing downtown, her steps to improve it have been strictly low-profile. She has:

–Created the Greater Downtown Development Authority and pushed state legislation to give it more power to negotiate deals.

–Overhauled the city’s Economic Development Corp., to which a new director, Andi Udris, was brought in with a downtown development background.

–Brought together city officials to address housing developers’ complaints about building code inspections.

“Every single day I am in meetings and on the telephone about downtown,” Barnes says. “I’m out there preaching the issues every day. I’m doing everything I can think of.”

Still, Barnes approach has lacked something significant: “The missing piece is clearly the money,” says Pete Levi, president of the Greater Kansas City Chamber of Commerce. “It’s all about the money, and the city is restrained by the fiscal constraints it’s in.”

So business leaders want Barnes to make sure downtown gets a larger share of capital improvements money. In the city’s five-year plan, downtown is slated to receive just 7 percent of $200 million allocated for roadways, bridges and economic development.

Additional money could come from bonds. Recently, the city’s finance department determined Kansas City had plenty of bonding capacity left. The Civic Council already had determined this approach makes sense.

“There isn’t anything the city has spent on downtown in a decade besides Bartle and the civic mall,” says Commerce’s James Kemper Jr.

Downtown boosters also want to see the mayor become more forceful, to follow through more on her downtown speeches.

For instance, Barnes has made housing a key to a better downtown, much like Mayor Wellington Webb did in Denver a decade ago. She could take a page from Webb and push for a city-backed loan program just for downtown housing development.

Likewise, Barnes is tackling a failed downtown project, just like Louisville Mayor Dave Armstrong is. But while Barnes waits for others to do something in the former Power & Light District, Armstrong has pushed his city to hire a developer to transform a vacuous galleria into an entertainment district.

“I think Kay has to decide what her legacy is going to be,” says Crosby Kemper III of UMB. “Her vision has been more diffuse.”

Government’s role in downtown’s revival shouldn’t be solely on Barnes shoulders. The state could help out more, particularly with legislation to grant additional development powers to the mayor’s downtown authority.

The federal government has a stronger track record of helping downtown. U.S. Sen. Kit Bond has been a guardian angel, funneling federal funds for such projects as Union Station and bus rapid transit.

Now he’s championing an idea from downtown business leaders to consolidate the region’s Internal Revenue Service operations at the U.S. Post Office on Pershing Road. It could be downtown’s single largest influx of new jobs in decades.

“It’s not up to me to have the grand plan,” Bond says, “but I’m in a position to help local leaders when they come up with their plans.”

The Symphony’s new offices and recital spaces at Webster House are steps away from its home at Helzberg Hall in the Kauffman Center. (Image from KC Symphony website)

From philanthropists

As a community trying to better itself, Kansas City has one big advantage–its philanthropic community.

At the end of the 1990s, Kansas City ranked No. 4 among the nation’s top 25 metropolitan areas in terms of per capita spending by foundations. The city’s big three foundations–the Ewing Marion Kauffman Foundation, the Hall Family Foundation and the Greater Kansas City Community Foundation–play a role in just about every major community initiative.

But their money has ended up downtown only sporadically.

The Hall foundation has been generous, from helping finance Quality Hill to helping Children’s Mercy Hospital expand. But the Kauffman Foundation’s focuses on entrepreneurship and youths do not necessarily involved investing in downtown.

Of Kauffman’s $89 million in grants last year, downtown-oriented programs received less than 10 percent. As its new chief executive, Carl Schramm says: “We don’t have a downtown strategy.”

In some of Kansas City’s peer cities however, foundations do more for their downtowns.

In Pittsburgh, a Cultural Trust took foundation grants as well as government funds to renovate historic theaters and establish a cultural district. In Indianapolis, the giant Lilly Endowment helped bankroll some new sports facilities downtown and even provided grants to lure new businesses–like the National Collegiate Athletic Association from Kansas City.

Here, some philanthropic leaders think they can make a difference for downtown, too.

One way is by making the proposed performing arts center a reality. The $304 million center for 16th and Broadway will be seeking around $250 million in private gifts. Almost half of that is already committed by the center’s main backer, Julia Irene Kauffman, mainly through the Muriel McBrien Kauffman Foundation.

The center will be counting on other charitable foundations and individuals, too, along with some public-sector backing, for the rest of the money.

Meanwhile the town’s top foundations expect to focus more attention on the little entrepreneurs who can add to the business mix and street-level activity downtown.

Schramm’s Ewing Marion Kauffman Foundation is expanding its loan and training programs for Kansas City’s budding small businesses, some of whom may end up locating downtown.

The community foundation is starting something similar, a fund to loan start-up money to small-scale projects like lofts and restaurants–only with more of a downtown emphasis than Kauffman.

“We will be activists,” promises Jan Kreamer, the community foundation’s president.

Entrepreneurs welcome this. “There are too many obstacles for the small entrepreneur to come downtown to make something happen and open a business,” says Matt Miquelon, who once ran a club downtown and now is part of a group called RevUpKC that is interested building downtown entrepreneurship.

“The little guys don’t get the support they need.”

H&R Block was the last major employer to come downtown in 2003.

Coming together

Kansas City’s private and public sectors have a sometimes rocky relationship.

On one hand, business executives tend to distrust city government because of its corruption cases and poor basic services. Even today, some in the business community opposed forming a cleanup district because it feared City Hall would, in the words of Commerce’s James Kemper Jr., “stop doing what little it’s doing.”

On the other hand, the business community’s penchant for detachment and aloofness turns off city officials. As former City Councilman Ken Bacchus explains: “The biggest issue I had in my eight years there was the lack of a real relationship with the business community. There was no reaching out. We could have made better decisions if the business community had worked with us.”

In our peer cities, these groups learned to bury the hatchet.

Listen to former Indianapolis Mayor Bill Hudnut III: “The mayor is an orchestra leader at best. We tried to get the different segments of the community playing together on the same page.” And he Nashville Downtown Partnership’s Steve Gibson: “We had a strong mayor with a vision and a business community that recognized the things (the mayor) was talking about.”

Here, business and government leaders believe they have some opportunities to collaborate.

Both sides think downtown needs a guide, something that can create a more stable environment for downtown investments. The business community thought it produced this with the Sasaki plan for downtown. City planners though, thought their FOCUS master plan covered downtown adequately.

As a compromise, the city has hired the architecture and planning firm HNTB Corp. to fuse the two plans. It should be done by the end of the year.

Then the public and private sectors can start bridging a larger chasm on the horizon–a new arena.

The Greater Kansas City Sports Commission, in cooperation with the city, is finishing up a plan for a new $200 million sports and entertainment arena, which could draw hundreds of thousands of visitors downtown annually.

The Sasaki plan determined the best sites were on either side of Grand Boulevard at 14th Street, to form a triangle of nearby attractions with Bartel Hall and the performing arts center.

Those arena sites happen to be owned by the UMB Kempers. Crosby Kemper III syas that land is “very valuable,” despite the fact that just a parking lot occupies one site and a one-story bank branch occupies the other. He adds: “A lot of it depends on how it’s proposed to us.”

In several of Kansas City’s peer cities, from Columbus, Ohio, to St. Louis, businesses ended up providing more for a new arena than just the land.

“For the arena to move forward, it will take a collaboration between business and civic groups along with the public sector and downtown landowners,” says Bill Hall, president of the Hall foundation and chairman of the sports commission. “You’re going to need many champions to do this.”

Other projects will require serious collaboration, too: Union Station, which needs at least $100 million for its operating endowment and better attractions; housing on part of Penn Valley Park, seen by some business leaders as a way to expand downtown housing opportunities; lining major downtown streets with trees, one of the ways to strengthen downtown’s sense of place.

“You need to collaborate and you really need to bring people together in this community to get things done,” says Bill Berkley, chief executive of Tension Envelope and chairman of the Civic Council. “If you don’t take that approach, you’re not going to be successful.”

First Fridays grew in popularity to become a street festival drawing up to 20,000 people.

What citizens can do

Just as differences between government and business leaders hinder progress for downtown, so do differences among citizens.

Just look at two recent examples: This summer, a $35 million bond issue that would have split proceeds between downtown and other neighborhoods failed at the polls. Last year, voters defeated light rail transit.”

Now, though, downtown’s business and government leaders show signs of coming together. A new generation of business executives regards downtown as a priority. The mayor has embraced this and placed some of them in important leadership positions for downtown.

And these two sides have been working to offer voters opportunities to help downtown.

Two are on the ballot this November. The first is the return of the $35 million bond issue, with downtown’s proceeds earmarked for parking garages and streetscaping downtown. The second is another Bartle Hall expansion, because conventions are one of the few things bringing people downtown.

Also on the November ballot is another Clay Chastain initiative. It calls for using the city’s last remaining half-cent sales tax for transit and park projects, but his plan has no backing from city leaders, who criticize it as vague as his four previous initiatives rejected by voters.

The bottom line is, it’s up to voters to save downtown, too.

Whatever they decide, here are some things to think about: As The Star has shown in this series, a healthier downtown can translate into faster-rising suburban home values, stronger overall job growth and a better area economy.

And with the right investments, downtown can be the new urban neighborhood, it can be the entertainment center, it can be the playground for the Northland, it can be the job center for the minority community.

Everyone in every neighborhood has a stake in a more dynamic downtown. So everyone needs to be involved.

Says Alex Pryor, proprietor of the chic Zin restaurant downtown: “I try to tell this to as many of my suburban friends as possible–‘Kansas City is the sun and the suburbs are the planets, and if one planet fizzles, it doesn’t mean the sun stops shining. But if the sun burns out, the planets die.

“I think there are a lot of people who don’t get this.”